ASIAN BUSINESS SCHOOL

A Study on Management Culture and Structure with reference

Project Report for the subject of Principles and Practices of Management in partial fulfilment of Masters in Business Administration (2011 - 2013)

Project Guide: Prof. Sandhya Aggarwal

Presented by: Abdul Fazal Khan MBA

ACKNOWLEDGEMENT

The completion of any project is not complete without thanking the people behind the venture & this project is no exception. Racing against the time & fast approaching deadlines, the fact that I am able to successfully complete the project just in time would not have been possible without the help and support of many people. Their constant guidance & encouragement coupled with my commitment were the cornerstones for the successful completion of the project. I express my thanks to the Dean, Ms. Latika Sahani of ASIAN BUSINESS SCHOOL, Noida for extending her support. It gives us immense pleasure to acknowledge the teachers whose help gave the needed confidence, enthusiasm, and perseverance. We express our gratitude to Ms. Sandhya Aggarwal for providing us the excellent guidance and Opportunities to complete this project.

EXECUTIVE SUMMARY
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively. Management comprises planning, organizing, staffing, leading or directing, and controlling an organization (a group of one or more people or entities or effort for the purpose of accomplishing a goal ) The study on MARUTI is the detailed research on Management Culture and Future Challenges .

TABLE OF CONTENTS 1. INTRODUCTION TO MANAGEMENT

5 7 15 18 19 22 24 38

2. INTRODUCTION OF COMPANY Product/ services Vision / Mission

Purpose & principles

Management level Business Ethics TQM

3. Literature review 4. Social responsibilities 5. SWOT Analysis 6. Future Plans 7. Bibliography

39 41 48 50 53

Chapter 1: Introduction to Management 1.1 Management roles

Management is important because it provides organization and leadership to a group of people or employees. Management can help people work towards a common goal together, as well as help things run more efficiently!

1.2 Why management?

Management theory is important because it is the study of how to make all the people in your organization more productive. If you are self-employed and have others working for you, or you outsource certain jobs you are unable to do, then you know how hard it is to find qualified competent professionals to provide you a service or work for you. You want to maximize labour productivity and learning how to manage people is key.

1.3 Globalization and Management

A Globalization Management System or GMS automates transactions to reduce the time and money employed by manpower performing repetitive, non-productive labour. Thus, human resources can be redeployed to more productive and strategic tasks. A GMS generally includes at least two types of technology: process management technology to automate the flow of work, and linguistic technology to aid the translator.

Chapter 2: Introduction of Company

MARUTI

Incorporation

Incorporated in 1981

Turnover

Rs.37522.4 Cr Audited results for April 1, 2010 to March 3, 2011

People

More than 15000 direct employees including more than 1400 managers

Parentage

MARUTI is a part of the 44.3 billion

Reach

Reaches over 6.3 million retail outlets including direct reach to over 1 million

R&D

Two R&D centers in India in New Delhi and Mumbai Maruti Udyog Limited is India's largest Fast Moving Consumer Goods Company with a heritage of over 75 years in India and touches the lives of two out of three Indians. Maruti works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. Company is a part of the everyday life of millions of consumers across India. Its portfolio includes leading household brands such as Maruti Suzuki India Limited (NSE: MARUTI, BSE: 532500) is a subsidiary company of Japanese automobile and motorcycle manufacturer Suzuki. The company offers a complete range of cars from entry level Maruti
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800 and Alto, to hatchback Ritz, A-Star, Swift, Wagon, Estillo and sedans DZire, SX4, in the 'C' segment Maruti Eeco and Sports Utility vehicle Grand Vitara The Company has over 16,000 employees and has an annual turnover of around Rs.19, 400 crores (financial year 2010 - 2011). It was the first company in India to mass-produce and sell more than a million cars. It is largely credited for having brought in an automobile revolution to India. It is the market leader in India, and on 17 September 2007, Maruti Udyog Limited was renamed as Maruti Suzuki India Limited. The company's headquarters are located in New Delhi Maruti Suzuki is India and Nepal's number one leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The BJP-led government held an offering of 25% of the company in June 2003. As of 10 May 2007, the government of India sold its complete share to Indian financial institutions and no longer has any stake in Maruti Udyog. Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto key car which at the time was the only modern car available in India, its only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced
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over 5 Million vehicles. Maruti Suzukis are sold in India and various several other countries, depending upon export orders. Models similar to Maruti Suzukis (but not manufactured by Maruti Udyog) are sold by Suzuki Motor Corporation and manufactured in Pakistan and other Asian countries

The company exports more than 50,000 cars annually and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Suzuki Alto tops the sales charts Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model. Its manufacturing facilities are located at two facilitiesGurgaon and Manesar south of Delhi. Maruti Suzukis Gurgaon facility has an installed capacity of 350,000 units per annum. The Manesar facilities, launched in February 2007 comprise a vehicle assembly plant with a capacity of 100,000 units per year and a Diesel Engine plant with an annual capacity of 100,000 engines and transmissions. Manesar and Gurgaon facilities have a combined capability to produce over 700,000 units annually. More than half the cars sold in India are Maruti Suzuki cars. The company is a subsidiary of Suzuki Motor Corporation, Japan, which owns 54.2 per cent of Maruti Suzuki. The rest is owned by public and financial institutions. It is listed on the Bombay and National Stock Exchange in India During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. In all, over six million Maruti Suzuki cars are on Indian roads since the first car was rolled out on 14 December 1983. Maruti Suzuki offers 14 models, Maruti 800, Alto, WagonR, Estilo, A-star, Ritz, Swift, Swift DZire, SX4, Omni, Eeco, Gypsy, Grand Vitara, Kizashi. Swift, Swift DZire, A-star and SX4 are manufactured in Manesar, Grand Vitara and Kizashi are imported from
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Japan as completely built units(CBU), remaining all models are manufactured in Maruti Suzuki's Gurgaon Plant. Suzuki Motor Corporation, the parent company, is a global leader in mini and compact cars for three decades. Suzukis technical superiority lies in its ability to pack power and performance into a compact, lightweight engine that is clean and fuel efficient. Nearly 75,000 people are employed

Directly by Maruti Suzuki and its partners. It has been rated first in customer satisfaction among all car makers in India from 1999 to 2009 by J D Power Asia Pacific. Sanjay Gandhi owned the Maruti Technical Services Limited, which ran into trouble and was liquidated. After the death of Sanjay Gandhi, the Indira Gandhi government assigned a delegation of Indian technocrats to hunt for a collaborator for the project. Initial rounds of discussion were held with the giants of the automobile industry in Japan including Toyota, Nissan and Honda. Suzuki Motor Corporation was at that time a small player in the four wheeler automobile sector and had major share in the two wheeler segment. Suzuki's bid was considered negligible. While the major companies were personally represented in the initial rounds of discussion, Osamu Suzuki, Chairman and CEO of the company ensured that he was present in all the rounds of discussion. Osamu in an article writes that it subtly massaged their (Indian delegation's) egos and also convinced them about the sincerity of Suzuki's bid. Suzuki in return received a lot of help from the government in such matters as import clearances for manufacturing equipment (against the wishes of the Indian machine tool industry then and its own socialistic ideology), land purchase at government prices foresting up the factory Gorgon and reduced or removal of excise tariffs. This ensured that Suzuki conscientiously nursed Maruti Suzuki through its infancy to become one of its flagship ventures.

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Relationship between the Government of India, under the United Front (India) coalition and Suzuki Motor Corporation over the joint venture was a point of heated debate in the Indian media till Suzuki Motor Corporation gained the controlling stake. This highly profitable joint venture that had a near monopolistic trade in the Indian automobile market and the nature of the partnership built up till then was the underlying reason for most issues. The success of the joint venture led Suzuki to increase its equity from 26% to 40% in 1987, and further to 50% in 1992. In 1982 both the venture partners had entered into an agreement to nominate their candidate for the post of Managing Director and every Managing Director will have a tenure of five years. R.C. Bhargava was the initial managing director of the company since the inception of the joint venture. Till today he is regarded as instrumental for the success of Maruti Suzuki. Joining in 1982 he held several key positions in the company before heading the company as Managing Director. Currently he is on the Board of Directors. After completing his five year tenure, Mr. Bhargava later assumed the office of Part-Time Chairman. The Government nominated Mr. S.S.L.N. Bhaskarudu as the Managing Director on 27 August 1997. Mr. Bhaskarudu had joined Maruti Suzuki in 1983 after spending 21 years in the Public sector undertaking Bharat Heavy Electricals Limited as General Manager. In 1987 he was promoted as Chief General Manager. In 1988 he was named Director, Productions and Projects. The next year (1989) he was named Director of Materials and in 1993 he became Joint Managing Director.

Suzuki Motor Corporation didn't attend the Annual General Meeting of the Board with the reason of it being called on a short notice. Later Suzuki Motor
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Corporation went on record to state that Bhaskarudu was "incompetent" and wanted someone else. However, the Ministry of Industries, Government of India refuted the charges. Media stated from the Maruti Suzuki sources that Bhaskarudu was interested to indigenize most of components for the models including gear boxes especially for Maruti 800. Suzuki also felt that Bhaskarudu was a proxy for the Government and would not let it increase its stake in the venture.] If Maruti Suzuki would have been able to indigenise gear boxes then Maruti Suzuki would have been able to manufacture all the models without the technical assistance from Suzuki. Till today the issue of localization of gear boxes is highlighted in the press. The relations strained when Suzuki Motor Corporation moved to Delhi High Court to bring a stay order against Bhaskarudu's appointment. The issue was resolved in an out-of-court settlement and both the parties agreed that R S S L N Bhaskarudu would serve up to 31 December 1999, and from 1 January 2000, Jagdish Khattar, Executive Director of Maruti Udyog Limited would assume charges as the Managing Director. Many politicians stated in parliament that the Suzuki Motor Corporation is unwilling to localize manufacturing and reduce imports. As of 2011 Gear boxes are still imported from Japan and are assembled at the Gurgoun facility. For most of its history, Maruti Udyog Limited had relatively few problems with its labour force. Its emphasis of a Japanese work culture and the modern manufacturing process, first instituted in Japan in the 1970s, was accepted by the workforce of the company without any difficulty. But with the change in management in 1997, when it became predominantly government controlled for a while, and the conflict between the United Front Government and Suzuki may have been the cause of unrest among employees. A major row broke out in September 2000 when employees of Maruti Udyog Ltd (MUL) went on an indefinite strike, demanding among other things, revision of the incentive scheme offered and implementation of a pension scheme. Employees struck work for six hours in October 2000, irked over the suspension of nine employees, going on a six-hour tools-down strike at its Gurgaon plant, demanding revision of the incentive-linked pay and threatened to fast to death if the suspended employees were not reinstated. About this time, the NDA
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government, following a disinvestments policy, proposed to sell part of its stake in Maruti Suzuki in a public offering. The Staff union opposed this sell-off plan on the grounds that the company will lose a major business advantage of being subsidised by the Government. The standoff with the management continued to December with a proposal by the management to end the two-month long agitation rejected with a demand for reinstatement of 92 dismissed workers, with four MUL employees going on a fastunto-death. In December the company's shareholders met in New Delhi in an AGM that lasted 30 minutes. At the same time around 1500 plant workers from the MUL's Gurgaon facility were agitating outside the company's corporate office demanding commencement of production linked incentives, a better pension scheme and other benefits. The management has refused to pass on the benefits citing increased competition and lower margins.

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PRODUCTS OF MARUTI

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Car Models Overview Maruti A-Star

A-Star LXi A-Star VXi A-Star ZXi A-Star VXi AT

Maruti Alto

Alto K10 LXi Alto K10 VXi

Maruti Swift DZire

Swift DZire LXi Swift DZire VXi Swift DZire ZXi Swift DZire LDi Swift DZire VDi Swift DZire ZDi

Maruti Eeco

Eeco Standard 5-Seater Eeco 5-Seater with A/C+Heater Eeco Standard 7-Seater

Maruti Estilo

Estilo LX Estilo LXI Estilo VXI

Maruti Grand Vitara

Grand Vitara 2.4 AT Grand Vitara 2.4 MT

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Maruti Gypsy

Soft Top Hard Top

Maruti Kizashi

Kizashi MT Kizashi CVT

Maruti Ritz

Ritz LXi Ritz VXi Ritz ZXi Ritz LDi Ritz VDi

Maruti Swift

Swift LXi Swift VXi Swift ZXi Swift LDi Swift VDi Maruti SX4

SX4 VXi SX4 ZXi SX4 ZXi AT SX4 ZXi MT Leather SX4 ZXi AT Leather SX4 VDi SX4 ZDi

Maruti WagonR

WagonR LX WagonR LXi WagonR VXi

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2.2 Maruti`s vision Statement

Maruti is Indias leader in the automobile industry. It believes that the customer is king. It is making sure that performance, after sales service and customer support are really good in India. Here are some key points from Marutis vision statement: 1. 2. 3. 4. Modernization of the Indian Automobile Industry Developing cars faster and selling them for less. Production of fuel-efficient vehicles to conserve scarce resources. Production of large number of motor vehicles which was necessary for economic growth. 5. Market Penetration, Market Development Similarly Product Development and Diversification. 6. Partner relationship management, Value chain, Value delivery network

2.3 Mission
The leader in the Indian automobile industry, creating customer delight and shareholder's wealth; a pride for India.

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2.4 Purpose & principles

Always working with integrity Conducting our operations with integrity and with respect for the many people, organisations and environments our business touches has always been at the heart of our corporate responsibility.

Positive impact
We aim to make a positive impact in many ways: through our brands, our commercial operations and relationships, through voluntary contributions, and through the various other ways in which we engage with society.

Continuous commitment
We're also committed to continuously improving the way we manage our environmental impacts and are working towards our longer-term goal of developing a sustainable business.

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Setting out our aspirations

Our corporate purpose sets out our aspirations in running our business. It's underpinned by our code of business Principles which describes the operational standards that everyone at Unilever follows, wherever they are in the world. The code also supports our approach to governance and corporate responsibility.

Working with others

We want to work with suppliers who have values similar to our own and work to the same standards we do. Our Business partner code, aligned to our own Code of business principles, comprises ten principles covering business integrity and responsibilities relating to employees, consumers and the environment.

Company structure Currently Suzuki holds 54.2% stake of Maruti, the balance being held by various QIBs, PCBs and
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public.

On BSE, Maruti has the highest market capitalisation in the auto sector. We are the largest car company in the

country. So far, we have produced more than 6.6 million cars. We are Suzuki's largest manufacturing facility,

outside Japan offering 11 models in over 150 variants. The turnover last year was USD 3.37 Bn employing more than 6700 employees. The high localization of parts Where the

within India is one of our distinct strengths.

company has 3 plants in Gurgaon facility, 4th plant was added with the capacity of 1 Manesar in 2006-07. hundred thousand at

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2.5 Management Level Board of Directors

The Board of Directors as repositories of the corporate powers act as a guardian to the Company as also the protectors of shareholders interest. This Apex body comprises of a Non- Executive Chairman, four whole time Directors and five Independent Non Executive Directors. The Board of the Company represents the optimum mix of

professionalism, knowledge and experience.

Director Name R C Bhargava Shinzo Nakanishi Shuji Oishi Keilchi Asai Kenichi Ayukawa Tsuneo Ohashi Pallavi Shroff Amal Ganguli DS Brar Designation Chairman Managing Director & Chief Executive Officer Director Director Director Director Director Director Director

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Manvinder Singh Banga O Suzuki S Ravi Aiyar

Director Director Company Secretary

Mr. R. C. Bhargava

1956: Indian Administrative Services 1954: Master of Sciences in Mathematics from Allahabad University 1964: Master of Arts in Developmental Economics from Williams College, Williams town, MA, USA

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2.6BUSINESS CONDUCT AND ETHICS Introduction

The Company is committed to conducting business in accordance with the highest standards of business ethics and complying with applicable laws, rules and regulations. The Company believes that a good corporate governance structure would not only encourage value creation but also provide accountability and control systems commensurate with the risks involved. The Companys Board of Directors / Management Personnel are responsible for and are committed to setting the standards of conduct contained in this Code and for updating these standards, as appropriate, to ensure their continuing relevance, effectiveness and responsiveness to the needs of local and international investors and all other stakeholders as also to reflect corporate, legal and regulatory developments. This Code should be adhered to in letter and in spirit.
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Compliance with Applicable Laws

The Company is committed to comply with all applicable laws, rules, regulations and guidelines in every jurisdiction where it operates. It is therefore desirable that Directors / Management Personnel possess / acquire appropriate knowledge of the legal requirements relating to their roles and duties to enable them to be in compliance thereof and to recognize potential risks. Directors / Management Personnel shall ensure due compliance for every activity undertaken under their supervision and authority. Directors / Management Personnel shall extend full co-operation to regulatory authorities, and disclose information as may be required.

Conflict of Interest
The term "conflict of interest" pertains to situations in which personal financial or other consideration(s) may compromise, or have the appearance of compromising the professional judgment of Directors / Management Personnel.

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A conflict of interest exists where the interests or benefits of Directors / Management Personnel or of people or entities related to them conflicts with the interests or benefits of the Company. Directors / Management Personnel are precluded from engaging in any activity that interferes with the performance or discharge of responsibilities towards the Company or is otherwise in conflict with the interest or prejudicial to the Company. In addition to mandatory disclosures all Non-Executive and Independent Directors shall disclose their association with any other company which, in their judgment, may lead to conflict of interest with the Company. All other Directors / Management Personnel are required to obtain approval from the Companys Corporate Governance and Stakeholders Interface Committee before accepting any other directorship / assignment in any company other than Reliance Group Companies, Subsidiaries, Associates etc. Directors / Management Personnel are free to make personal investments and enjoy social relations and normal business courtesies. They should however ensure that such interests do not directly or indirectly influence the performance of their responsibilities.
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Directors / Management Personnel are advised to avoid conducting the Companys business with a relative, or with a business in which a relative is associated in any significant role.

If there are any transactions proposed with such related parties within the knowledge of Directors / Management Personnel, they must report the same to the Compliance Officer. If determined to be material to the company, the transactions shall be placed before the Audit Committee for review. Any dealings with a related party must be conducted on an arms length basis and on commercial terms and no preferential treatment shall be given.

If a proposed transaction or situation raises any question or doubts, the Compliance Officer should be consulted.

Holding or contesting an election for any political post by Executive Directors /Management Personnel is discouraged as it could interfere with the performance and discharge of responsibilities towards the Company. If any Executive Director / Management Personnel decides to consider a

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political post, the same shall be disclosed to the Corporate Governance and Stakeholders Interface Committee. The Committee shall consider whether the acceptance of such a post would be in any manner prejudicial to the interests of the Company and make appropriate recommendations to the Board.

Conduct of Business Relationships

The Company expects all its business to be conducted in a legal and ethical manner. The quality of products and the efficiency of services at competitive prices will be the biggest tool for marketing activities. Profits by no means justify use of unfair / unethical business practices. Directors / Management Personnel shall not make any promises or commitments that the Company does not intend or would not be able to honor. Also, they should not be engaged, directly or indirectly, in any act, dealing or conduct likely to bring discredit to the Company. Directors / Management Personnel must uphold the highest standards of integrity and ethics in every kind of third party dealings. They shall not give, offer, or authorize the offer, directly or indirectly, of anything of value

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(tangible or intangible) to any third party to obtain any improper advantage. A contribution or entertainment shall not be offered to anyone in the course of business that might create the appearance of an impropriety. However, some modest and acceptable corporate gifts etc. appropriate to give in the normal course of business practice may be acceptable.

Protection & Proper Use of Companys Assets & Resources

Directors / Management Personnel shall as far as practicable, protect the Companys assets from loss, damage, misuse or theft and ensure that the assets are only used for business purposes and other purposes specifically approved by Management and must never be used for unauthorized purposes. Directors / Management Personnel shall not apply the Companys assets / resources and/or proprietary information for personal benefit and/or for the benefit of any other related party.

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Intellectual Property
Intellectual Property Rights (IPR) broadly covers patented or potentially patentable inventions, trademarks, service marks, trade names,

copyrightable subject matter, and trade secrets. Directors / Management Personnel shall make their best efforts to protect all such Intellectual Properties related to the Company, as it is critical to the Companys overall success. It is advisable to highlight and consult the Chairman / Compliance Officer for determining the appropriate course of action whenever there is lack of clarity and issue of any kind related to IPR.

Privacy & Confidentiality

Confidential information includes all information of the Company not authorized by the management for public dissemination. This includes information on trade, trade secrets, confidential and privileged information regarding customers, employees, information relating to mergers and acquisitions, stock splits and divestitures; non-public information about discussions and deliberations relating to business issues and decisions,

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between and among employees, officers and Directors in formal meetings or otherwise, and will include all such information which is not available in the public domain at that point of time. The Company believes that protection of all confidential information is essential and is committed to protecting business and personal information of confidential nature obtained from clients, associates and employees. Directors / Management Personnel shall ensure that no confidential information is disclosed inadvertently or otherwise. Confidential information shall be disclosed to persons, both internal and external, only on a need to know basis and public disclosure shall be made with appropriate approval or as legally mandated. Directors / Management Personnel shall ensure that all confidential information available to them by virtue of the office they hold is never directly or indirectly released to any person or entity, or made public, otherwise than as stated above.

Corporate Opportunities
Except as may be approved by the Board of Directors or a Committee thereof, Directors / Management Personnel are precluded from:
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 taking for themselves personally, opportunities that belong to either the Company or are discovered through the use of Companys property, information or position; using the Companys property, information, or position for personal gain; and competing with the Company

Interaction with Media

To facilitate the achievement of the Companys vision and business plans, it is necessary to communicate the policies, plans and accomplishments in the most effective manner through the media to our investors, customers, existing and potential, other stakeholders and to the community at large. All statements made to the media on behalf of the Company should be true and fair. Only persons duly authorized by the Management are allowed to interact with media on specified subjects. Disclosures of any information other than statutory disclosures or those specifically authorized by the Management is prohibited.
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Disclosure of information on proceedings of board meetings / committee meetings / internal meetings, and disclosure of forward-looking statements is prohibited. In case any such disclosure has to be made it has to be approved by the Management and shall be combined with cautionary statements, wherever required.

Directors / Management Personnel shall not disclose non public information selectively to any particular group as it may lead to unfair advantage / discrimination. For any outside publication of books, articles or manuscripts which relate specifically to the Companys business, policies and processes, Directors / Management Personnel should take the approval of the Management prior to its release. All such documents should be supplemented by a statement: All views & observations made/expressed in this article/presentation are solely that of the authors and the Company is in no way responsible for the substance, veracity or truthfulness of such views and statements.

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Fraudulent and Unfair Practices in the Securities Market

The Companys securities are listed on the major Stock Exchanges. The Company is committed to comply with securities laws in all jurisdictions in which its securities are listed. The Company prohibits its Directors / Management Personnel from any fraudulent and unfair trade practices in the securities market, with regard to the securities of the Company or of any other company with whom the Company has business dealings to the best of their knowledge.

Fair Dealing
Director / Management Personnel shall not take a discriminatory stance towards or give unfair advantage to the Company's employees, customers, suppliers, or competitors through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair-dealing practice. No discrimination shall be done on the basis of caste, religion, sex, nationality or disability of any kind towards any employees, customers, suppliers, or any business partner.

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Health, Safety & Environment

The Company believes in sustainable development and is committed to be a responsible corporate citizen. To uphold the Companys interest and preserve the quality of life of all concerned, the business and operations of the Company shall be conducted in an environmentally friendly manner and provide a safe and healthy working environment to its employees. Directors / Management Personnel shall ensure compliance with all applicable environmental, safety and health laws and regulations and internal policies.

Reporting of Illegal or Unethical Behavior

The Company shall promote ethical behavior in all its business activities. Employees are free to report existing/probable violations of laws, rules, regulations or unethical conduct to their immediate supervisor or such other person as may be notified by the Management to the workgroups. Such reports received from any employee will be reviewed by the

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Corporate Governance and Stakeholders Interface Committee from time to time. In accordance with the Companys Whistleblower Policy the Directors / Management Personnel shall not attempt to suppress/conceal any such view or reporting. The confidentiality of those reporting violations shall be protected and they shall not be subjected to any discriminatory practices.

Applicability of the Code

This is a comprehensive code and applies to all Directors /Management Personnel. However, the provisions shall apply to Executive and NonExecutive Directors including Independent Directors only to such extent as may be applicable depending on their respective roles and responsibilities. Directors / Management Personnel shall communicate any suspected violations of the Code promptly to the Corporate Governance and Stakeholders Interface Committee or the Chairman of the Board. Suspected violations will be investigated by or at the direction of the Board or the Corporate Governance and Stakeholders Interface Committee and appropriate action will be taken in the event that violation is confirmed.
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The Code does not specifically address every potential form of unacceptable conduct, and it is expected that Directors / Management Personnel will exercise good judgment in compliance with the principles set out in this Code. Every Director / Management

Personnel has a duty to avoid any circumstances that would violate the letter or spirit of this Code. The Compliance Officer, as designated by the Chairman, will be the principal officer for this Code. He is empowered to report to the Chairman of the Board or the Corporate Governance and Stakeholders Interface Committee on any matter relating to the implementation of the Code. The Compliance Officer should be consulted if there is any doubt or lack of clarity about any aspect in the Code. The Corporate Governance and Stakeholders Interface Committee or the Chairman of the Board may also be consulted wherever required.

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2.7 Total Quality Managemet

India's largest car maker Maruti Udyog Ltd on Monday announced setting up of a Centre for Excellence in collaboration with its suppliers. The centre will provide consultancy and training support to Maruti's suppliers and sales network to enable them to achieve world-class standards in quality, cost, service and technology orientation. It will work with Maruti's partners to implement practices like TQM, TPM and TOPS (Team Oriented Problem Solving techniques). The Centre will also train Maruti employees in quality related issues. Maruti has contributed Rs 10 crore to the corpus of the centre, which is registered as a 'Not for Profit' society.

Maruti managing director Jagdish Khattar said: "Maruti is committed to achieving global standards in Quality, cost, service and technology and customer orientation. For this, our suppliers have to be upgraded to world class levels. The centre will support our partners in this regard, including smaller units which may not be exposed to world class quality practices." Many of Maruti's dealerships and suppliers have an ISO 9000 certification. A few leading Suppliers have also implemented TPM, TQM and Lean Management practices with the help of reputed international consultants. But many other suppliers have a handicap by way of inadequate facilities, lack of exposure and absence of a benchmark in India. The centre will help these units to upgrade.

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3. Review literature
Maruti Suzuki is India's number one leading automobile manufacturer and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. The Indian government held an initial public offering of 25% of the company in June 2003. As of 10 May 2007, Govt. of India sold its complete share to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog. Maruti Udyog Limited (MUL) was established in February 1981, though the actual production commenced in 1983 with the Maruti 800, based on the Suzuki Alto kei car which at the time was the only modern car available in India, its only competitors- the Hindustan Ambassador and Premier Padmini were both around 25 years out of date at that point. Through 2004, Maruti Suzuki has produced over 5 Million vehicles.Maruti Suzukis are sold in India and various several other countries, dependingupon export orders. Models similar to Maruti Suzukis (but not manufactured by Maruti Udyog) are sold by Suzuki Motor Corporation and manufactured in Pakistan and other South Asian countries.The company annually exports more than 50,000 cars and has an extremely large domestic market in India selling over 730,000 cars annually. Maruti 800, till 2004, was the India's largest selling compact car ever since it was launched in 1983. More than a million units of this car have been sold worldwide so far. Currently, Maruti Suzuki Alto tops the sales charts and Maruti Suzuki Swift is the largest selling in A2 segment. Due to the large number of Maruti 800s sold in the Indian market, the term "Maruti" is commonly used to refer to this compact car model (in India, Hinduism's Hanuman is known as
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"Maruti").Maruti Suzuki has been the leader of the Indian car market for over two decades.Its manufacturing facilities are located at two facilities Gurgaon and Manesar south of Delhi....

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4. Socail Responsibility
Sustainability Sustainability at Maruti Suzuki refers to sum total of all the actions and initiatives undertaken by the company for its long-term survival and growth. To achieve long-term sustainability and prosperity the company has nurtured a socially responsible behaviour towards its various stakeholders. Since inception, the company has proactively taken care of the needs and sustainable growth of its stakeholders and they in turn, have supported the company in achieving its vision and business results year after year. As a result, sustainability has become an integral part of the company's approach to business and decision making. CSR Policy "While working to enhance shareholder wealth, Maruti Suzuki will regularly engage with all stakeholders to assess their needs and through its products, services, conduct and management initiatives, promote their sustained growth and well - being" Policy Guidelines Company will follow responsible business practices in all its functions and operations and will strive to implement them at its suppliers, dealers and other business partners. Company will continue to remain ahead of law in pursuit of environment protection and energy conservation at its
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manufacturing facilities, and in development of products that use fewer natural resources and are environment friendly. Company will be deeply committed towards the welfare of its employees, their families and communities around its operations to improve quality of life as a whole. Company will develop products and services that fulfil the aspirations of customers, build a strong and lasting bond with them, proactively support them during natural calamities, delight them with after sales services and availability of spares. Company will continue to provide technological and managerial support to its suppliers and dealers to further their profitable and sustainable growth. As an expression of thanks to the local community and the people of the country Company will undertake initiatives that might not be directly linked to its business. Company will partner with government, NGOs, business partners to contribute positively towards economic and human development of the society especially underprivileged people. Company will encourage and recognize its employees for volunteering in the community in the spirit of serving and sharing their expertise and skills. Company will strive to constantly build organizational capabilities, like any other competency, position suitable people and have a proper organizational structure to ensure implementation of CSR policy, guidelines and programs. Company will engage with reputed external agencies for audit of its CSR activities for the purpose of identifying areas of improvement, authenticity of data and reporting. Company will monitor the progress on various CSR programs in a structured manner, document the performance against the set targets and publish a report every year on its CSR performance and share with its key stakeholders.
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Awards World Environment Foundation has awarded World environment foundation has awarded Maruti as winner of Golden Peacock award for Environment Management 2007. Renewable energy department, Haryana Government has awarded first prize for excellence in implementation of Energy Conservation measures in industrial sector. The company has remained ahead of regulatory requirements in pursuit of environment protection and energy conservation at its manufacturing facilities, and in development of products that use fewer natural resources and are environment friendly. The company credited the 'Just-in-Time' philosophy adopted and internalized by the employees as the prime reason that helped to excel in this direction. Practicing 3R (Reduce, Reuse and Recycle) The company has been promoting 3R since its inception. As a result the company has not only been able to recycle 100% of treated waste water but also reduced fresh water consumption. The company has implemented rain water harvesting to recharge the aquifers. Also, recyclable packing for bought out components is being actively promoted. Greening of Supply Chain The company has been facilitating implementation of Environment Management System (EMS) at its suppliers' end. Regular training
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programs are conducted for all the suppliers on EMS. Surveys are conducted to assess the vendors who need more guidance. The systems and the environmental performance of suppliers are audited. Adopting energy saving technologies While the company continuous to improve energy saving initiatives through numerous Kaizens (continuous improvements) on the shop floor, thrust on adopting energy saving technologies has increased phenomenally. Three-coat-one-bake painting system: The company introduced the three-coat one-bake system at its Manesar facilities. In this state of the art painting system, three wet-on-wet coats are applied and baked together. Conventional painting systems use two baking steps before the final finish. This helps is lower energy consumption and yet improving the productivity levels. The green co-efficient of this system is much better than the conventional system. Road Safety The company has been playing a leading role for many years now in promoting road safety and safe driving in the country. The company believes that in addition to fund support, one of the best ways for corporates to fulfil their social responsibility is by offering their managerial skills to society. In line with this, the company manages two Institutes of Driving Training & Research (IDTR) in Delhi and Maruti Driving Schools across country. Through these facilities, the company has brought
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international standards in driving training and state of the art training infrastructure in the country. The first major step towards promoting road safety was in the year 2000 when Delhi Government invited the company to manage the Institute of Driving Training and Research (IDTR) and start driving training courses. The company introduced training facilities and infrastructure including world-class driving test tracks, advanced computer simulators and training modules as per international standards at the institute, which is spread over an area of 14.5 acres. Regular research in road safety and safe driving was also started at the institute. In 2006, the second IDTR was set up to promote road safety by primarily targeting non-commercial drivers and impart driving training to them. This institute is also equipped with the same facilities and infrastructure as made available in the first IDTR Setting up GUJARATI In a landmark move the company signed an MoU with the Government of Gujarat, to set up, manage and run The Gujarat Regional Automobile Training Institute ( to be referred as GUJRATI) at Gajadara village of Waghodia taluka in Vadodara district. It is the first of its kind initiative in the country. The institute will not only provide driving training to tribal youth, it will also offer automobile technical training to them and help their employability. Several other state governments, such as Haryana, Bihar, Uttarakhand, Chattisgarh and West Bengal have also approached the company to set up driving training institutes in their states. The company has already signed an MoU with the Government of Haryana for setting up two driving training institutes at Rohtak and Bahadurgarh.
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Maruti Driving Schools The company has also involved its dealers across the country in promoting road safety and safe driving. In collaboration with them, the company has set up 43 Maruti Driving Schools in 38 different locations across the country. These schools are equipped with world class, state of the art driving simulators offer training courses for beginners as well as refresher programs. Over 41,500 people have trained so far. (Pg. 104, Annual Report 2007-08) Practicing 3r (Reduce, Reuse And Recycle) The Company has been promoting 3R since its inception. As a result the Company has not only been able to recycle 100% of treated waste water but also reduced fresh water consumption by 28%. The Company has implemented rain water harvesting to recharge the aquifers. Also, recyclable packing for bought out components is being actively promoted. Greening of Supply Chain The Company has been facilitating implementation of Environment Management System (EMS) at its suppliers' end. Regular training programmes are conducted for all the suppliers on EMS. Surveys are conducted to assess the vendors who need more guidance. The systems and the environmental performance of suppliers are audited. Community Initiatives The Company works closely with local communities around its manufacturing facilities to improve their quality of life. The Company has adopted four villages surrounding its Manesar plant - Kasan, Dhana,
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Alihar and Baas Kusla and launched sustainable livelihood programmes for underprivileged communities. The initiatives are focused on four key areas: Health, Education, Employment Generation through Vocational Trainings & Basic Infrastructure Development. Road Safety The Company has been playing a leading role for many years now in promoting road safety and safe driving in the Country. The Company believes that in addition to monetary support, one of the best ways for corporates to fulfill their social responsibility is by offering their managerial skills to society.

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5. SWOT Analysis Strength

MUL is in a leadership position in the market. Major strength of MUL is having largest network of dealers and after sales service caters in the country. Self competing product range in small car segment o Maruti 800 o Omni o Alto o Zen o Wagon R Good promotional strategy is adopted by MUL to transform its thoughts to the people about its products o Baleno: Missed the flight catch Baleno The most comfortable Car even in long drives. o Esteem: My Daddys Big Car Affordable mid size car o Alto: Lets Go The fuel efficient and affordable car o After Sales Service Kya yanha Maruti Service Station hai Availibility of service stations even in the remotest place in the country. Refurbished Cars: MUL has also entered into second hand car market with a brand name Maruti True Value. Loyal Customer Base is another big strength of MUL. In JD Power survey, MUL has been awarded consequently 5th year for best customer satisfaction. Strong Brand Value Availability of raw material

Weakness

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Lack of having products in mid size car segment could result in shifting of loyal customers who has a desire to upgrade their cars. Low interior quality in side the cars. Labour Laws and Labour Unions are not in a good form in India. Government intervention due to having share in MUL.

Opportunity

MUL may encash the opportunity to enter again into the diesel segment of the cars to compete its nearest competitor TATA in diesel segment of small cars. Though MUL launched Zen in diesel version but it was not successful. MUL has launched its LPG version of Wagon R and it was a good move simultaneously MUL can start R&D on electric cars for a much better substitute of the fuel. Economic growth of the country is sound and promising in future. Liberal policies of GOI. Big Market: Domestic and Abroad

Threat

Tata Motors is planning to launch a car with a price tag of Rs. 1 Lac and that could give a big impact on sales of MUL HMIL is a challenger and trying hard to achieve number one position in the market. China may give a good competition as they are also planning to enter
into car segment.

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6.

Future plan

The country's largest car maker Maruti Suzuki India plans to increase its R&D manpower by over 20 per cent to more than 1,300 people in 2011-12 as it looks to become the hub of research activities for parent Suzuki. The company's R&D division is at present working to enhance its capability to develop a complete model in India. "The company's R&D team has plans of increasing its manpower from 1,070 numbers to more than 1,300 numbers in FY 201112," Maruti Suzuki India (MSI) said in its Annual Report for 2010-11. The company had hired 102 people in 2010-11 for its R&D division, it added. The report further said the company is developing its "engineering skills to design and develop cars to delight the Indian consumer and establish Maruti as the R&D hub of Suzuki Motor Corporation (SMC) in Asia outside Japan". To achieve this goal, MSI's R&D arm is focusing on design and development of new products and full body change, followed by development of new platforms. "The company's R&D team already has the capability for carrying out minor changes and co-design with SMC for new models. Company's R&D team is on the path for acquiring capability to make full body changes indigenously," MSI said. As part of its future projects, the company plans to develop new products on its own strength. It is also looking at developing more products with alternative fuel options.
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In order to meet its requirement, the company is increasing the spending of the R&D team by multi-fold. During FY'11, MSI spent Rs 416.3 crore on R&D activities which was over two-fold higher than its spending during the previous year that stood at Rs 173.3 crore. To consolidate its research capabilities, the company is currently investing Rs 2,500 crore for a K-series engine plant and setting up of a dedicated R&D facility at Rohtak. Commenting on these development, MSI Managing Director and CEO Shinzo Nakanishi said: "The growth of the Indian market deserves additional and localised R&D capability that can serve India even more closely. "Whether it is working on next generation CNG technology or hybrid or electric cars, or launching new models or variants, we need to develop R&D capability in India along with our suppliers". He said the company is also studying the feasibility of electric vehicles mobility in India along with the government and other industry players. "While working on latest technologies to enhance fuel efficiency, we are also working with the industry and policy makers to evolve mandatory fuel efficiency standards for the car industry," Nakanishi said. MSI is at present investing over Rs 3,625 crore to set up two new plants with 2.5 lakh annual capacities each inside the Manesar facility. It already has one plant in the facility. Commenting on these two upcoming plants, MSI Chairman R C Bhargava said: "We decided to move forward the second line at Manesar and it would be in production in September 2011. Work is also
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proceeding rapidly on the third line at Manesar, and it is scheduled to be completed by September 2012". The company had earlier announced hiring of at least 2,300 people, mainly for its upcoming two new plants in Manesar, within next two years. With this, its workforce will expand by about 27 per cent to nearly 11,000 employees. Bhargava further said MSI is looking to expand exports of small cars, mainly to Europe. MSI's exports during last fiscal declined by 6.31 per cent at 1,38,266 units. However, domestic sales grew by 30.08 per cent at 11,32,739 units in 2010-11.

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7. BIBILIOGRAPHY
http://articles.economictimes.indiatimes.com http://www.marutisuzuki.com/ http://managementfunda.com/swot-analysis-of-Maruti/ www.zigwheels.com/newcars/Maruti-Suzuki en.wikipedia.org/wiki/Maruti_Suzuki www.quikr.com/literature-review...maruti.../literature-review...maruti. www.gaadi.com/cars/Customer-satisfaction-review-maruti www.marutisuzuki.com/board-of-directors.aspx economictimes.indiatimes.com http://www.karmayog.org/csr501to1000/csr501to1000_20997.htm ttp://www.marutisuzuki.com/sustainability.aspx (Sustainability) http://www.marutisuzuki.com/csr-policy.aspx (CSR Policy) http://www.marutisuzuki.com/environment.aspx (Environment) http://www.marutisuzuki.com/road-safety.aspx (Road Safety) http://www.marutisuzuki.com/cars-images/image/pdf/SUSTAINABILITY.pdf timesofindia.indiatimes.com Business Source: Powered by Tickerplant

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